rtmark
LearnBonds.com

Microsoft is Spending Billions on Acquisitions – Let’s Follow the Money

Microsoft stock

Learnbonds looks at six of the biggest Microsoft Corporation purchases. Mergers and acquisitions are nothing unusual in the business world. They are a great way to expand influence, resources and expertise, or to simply eliminate competition. Although not limited to the industry, tech corporations seem especially aware of acquisition power. The likes of Microsoft (MSFT) snatch up promising businesses more often than people might think.

Multinational corporations can go to extraordinary lengths for what they deem to be the perfect purchase. Yet great acquisitions do not always lead to great profits, and even Microsoft has turned a few giant buyouts into giant blunders. So, which of the many Microsoft buyouts have dug deepest into the company’s pockets, and how well do they perform under the MSFT umbrella today? Take a look at these six major Microsoft Corporation purchases.

Microsoft buys Visio

Visio can rightly be considered the backbone of Microsoft’s office software. Seventeen years ago, the Windows giant paid a massive $1.5 billion in stock for this soaring company. It was Visio’s innovations in diagramming software that caught Microsoft’s attention.

Today, Office 365 stands among the most widespread digital office tools worldwide. This is in spite of market rivals eating away at its user base. However, Todd McKinnon, the CEO at Okta, reported on the software’s mass-adoption back in 2015. “Office 365 usage has skyrocketed,” Mckinnon reported. Okta is a cloud product used by corporations to handle passwords and worker accounts. It is especially trusted for its capacity to safely transmit accounts and data onto other cloud platforms. Office 365 is at the head of Okta’s list of popular office software.

Yet staying the best is no easy feat and the success of Office 365 is mostly Visio’s doing. Products like Microsoft Word leaped to the fore through Visio’s expertise in diagramming software. Back in 2000, the company was a leader in producing unique diagramming solutions for businesses and enterprise users. It is now known as the Visio Division and helps Microsoft product users depict their idea’s and data for others to see.

Mojang adopted by MSFT

Mojang is the creator of Minecraft. Microsoft Corporation brought the company for $2.5 billion in 2014. The hype surrounding the game has just about fizzled out, so this acquisition seems a pretty shaky choice right now. That said, MSFT has led Minecraft and its related product into unexpected and exciting territories. In light of the game’s appeal to the youth, Microsoft has added an educational edition targeting school and even college students.

Whether Minecraft will keep its flavor in years to come also under question. There is little doubt Microsoft will innovate the platform it sees fit, especially since the game creators didn’t stay on-board after the buyout. Yet MSFT is certain that its “investments in cloud and mobile technologies will enable ‘Minecraft’ players to benefit from richer and faster worlds, more powerful development tools, and more opportunities to connect across the Minecraft community.”

More than 100 million copies of Minecraft have been sold across all platforms — PC, mobile and console. That means the game already has a large reach. Microsoft need only find innovative ways of capitalize on it. The makers of Windows consider this Mojang creation as the biggest game in history.

aQuantive fell under Windows giant

$6.3 billion was forked out for this online giant. aQuantive was soaring at the time of its purchase and Microsoft was keen to get in on its success. It was taken in in 2007, a time when the power of internet adverting was coming to the fore. aQuantive was a major internet advertising giant in a moment when online ads proved to be a lucrative business.

Microsoft held ambitions of becoming a global, online ad powerhouse, yet aQuantive flopped and was considered a complete write-off in 2012. This proved that the Windows giant was nowhere near ready to take on the efforts and challenges of this extremely cut-throat industry. To this day, Microsoft only dabbles in online advertising with very little to show for it.

Microsoft Corporation (NASDAQ:MSFT)

In fairness, it was not all mismanagement which led to aQuantive’s demise. Microsoft’s online search engine, Bing, also failed to keep up with Google. The company’s presence online was minuscule in contrast, and efforts to make it shine were like water off a duck’s back. It was clear to the company in 2012 that aQuantive had no more value since Microsoft did not have enough of the search engine market to turn a profit.

Nokia smartphones flopped on arrival

One of the biggest misconceptions about this deal is that Microsoft bought Nokia, which is no where near the truth. The Finnish cellular giant was already losing in the smartphone market after it turned to Microsoft’s mobile OS. In April 2013, Nokia sold its smartphone business to Microsoft for $7.2 billion. In addition to that, Nokia agreed not to produce smartphones for a certain period. It returned to the smartphone market with new Android releases in 2017.

MSFT is determined to win over smartphone users. The weight of a holistic windows ecosystem relies on this. However, while Windows is loved worldwide, the OS finds no affection when translated into smartphones. Microsoft’s failure to make the smartphone market fall in love with Windows Phone meant that the company had to re-evaluate its smartphone approach. Unfortunately, that meant the Nokia acquisition had to be scrapped too.

The Nokia smartphone purchase was deemed a write-off. MSFT had to let former Nokia employees go and sold the acquired phone business for $350 million.

Skype was a winner’s purchase

Skype was bought for $8.5 billion in 2011. That price had much of the public, and even the most trusting MSFT investors, turn their heads in shock. However, it was not an unfair fee considering the company held an overwhelming majority of the consumer VoIP market.

Not much else can be said about Skype other than that it is still strong tool. This video chat tool is one of Microsoft’s most sound, big-time purchases today. The online communication tool has not lost its relevance but there are more competitors chipping away at its influence in 2017.

This purchase rendered Microsoft a massive player in the realm of video chat. It was also the company’s biggest acquisition before 2016.

Microsoft (MSFT ) bought LinkedIn – it’s biggest purchase

Rumors were circling for months ahead of the announcement, but Microsoft finally went ahead and did it 2016. The makers of Windows added a social network to it ranks, one that caters to professionals too — their primary market base. LinkedIn was adopted for a jaw-dropping $26.2 billion. This makes the purchase Microsoft’s biggest ever. In fact, in regards to tech companies the LinkedIn acquisition is second only to the EMC buyout made by Dell in 2015. Dell paid and eye-popping $67 billion for EMC.

It might be too soon to say how this purchase will play out. However, LinkedIn is often considered the Facebook of the professional world. The platform has a great deal of influence and has the potential to thrive under MSFT.

Trusted & Regulated Stock & CFD Brokers

Rating

What we like

  • 0% Fees on Stocks
  • 5000+ Stocks, ETFs and other Markets
  • Accepts Paypal Deposits

Min Deposit

$200

Charge per Trade

Zero Commission

Rating

64 traders signed up today

Visit Now

75% of investors lose money when trading CFDs.

Available Assets

  • Total Number of Stocks & Shares5000+
  • US Stocks
  • German Stocks
  • UK Stocks
  • European
  • ETF Stocks
  • IPO
  • Funds
  • Bonds
  • Options
  • Futures
  • CFDs
  • Crypto

Charge per Trade

  • FTSE 100 Zero Commission
  • NASDAQ Zero Commission
  • DAX Zero Commission
  • Facebook Zero Commission
  • Alphabet Zero Commission
  • Tesla Zero Commission
  • Apple Zero Commission
  • Microsoft Zero Commission

Deposit Method

  • Wire Transfer
  • Credit Cards
  • Bank Account
  • Paypall
  • Skrill
  • Neteller

What we like

  • 0% Commission
  • Trade Stocks Via CFDs
  • Authorized & regulated by the FCA

Min Deposit

$100

Charge per Trade

Zero Commission

Rating

Visit Now

76.4% of retail investor accounts lose money when trading CFDs with this provider.

Available Assets

  • Total Number of Stocks & Shares+2000
  • US Stocks
  • German Stocks
  • UK Stocks
  • European
  • ETF Stocks
  • IPO
  • Funds
  • Bonds
  • Options
  • Future
  • CFDs
  • Crypto

Charge per Trade

  • FTSE 100 Zero Commission
  • NASDAQ Zero Commission
  • Dax Zero Commission
  • Facebook Zero Commission
  • Alphabet Zero Commission
  • Tesla Zero Commission
  • Apple Zero Commission
  • Microsoft Zero Commission

Deposit Method

  • Wire transfer
  • Credit Cards
  • Bank Account
  • Paypal
  • Skrill
Users should remember that all trading carries risks and users should only invest in regulated firms. Views expressed are those of the writers only. Past performance is no guarantee of future results. The opinions expressed in this Site do not constitute investment advice and independent financial advice should be sought where appropriate. This website is free for you to use but we may receive commission from the companies we feature on this site.
Avatar